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Won’t get fooled again (part 2)
22-Jul-2010
Here is the second in a 2 part series of common decision-making pitfalls that can trick our minds into making irrational decisions - derived from an article in Litemind. Part 1 can be found here.
The herd mentality.
“Social proof” is part of our genetic survival mechanism. When the herd runs, it makes sense to run with them – without waiting to see if there really is a lion chasing us. The “popular choice” is generally the safe option. And of course, there is always peer pressure to follow the crowd. So what if the crowd is wrong? Failing along with many people is not so bad (after all, we’re all in the same boat), but when we fail alone we bear the consequences ourselves. However, recent events remind us that following the herd is not always the wisest option!
Solution:
When analyzing information, shield yourself from popular opinion - at least at first. Beware of “buying” products or ideas that are marketed on their popularity, rather than on their merit. Be willing to defend your chosen point of view even if it is unpopular.
The Illusion of Control.
The outcomes of our decisions are usually complex and interconnected. People assume they can control events much more than they actually can - and underestimate the role of chance and random events.
Solution:
Accept responsibility for the things you can influence - but for most events the only thing you can control is how you choose to respond to them. Use the “Triple A” strategy of accept, assess and augment:
- Accept that you are never fully in control.
- Assess the likelihood of random events.
- Augment your plans to make sure you manage the risk - and can respond to random events effectively.
Selective memory.
We tend to remember highly emotional and very recent events. The more “special” an event is, the greater it’s potential to influence and distort our thinking. The media is notorious for playing on our emotions and exaggerating the importance of certain events while conveniently neglecting others.
Solution:
Don’t rely on your memory or the media – get hard data. Evaluate information based on relevance and accuracy - not on how emotional the message is - or how much exposure it gets in the media. Seek opinions from neutral people who are not emotionally involved.
The Superiority Trap.
93% of drivers rate themselves as "above average" in terms of driving ability. Of course this can’t possibly be true. People generally overestimate their capabilities, leading to blind spots and errors in judgment.
Solution:
Be humble. Don’t assume “you know” – keep asking questions, do your research and confront the brutal facts. Surround yourself with honest people. We all have blind spots - and we need honest people around us to point them out to us.
If you enjoy learning about the use of psychology to make better decisions, we have written related articles here and here.
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